PHILIPPINE SHARES dropped on Tuesday ahead of the release of March inflation data and concerns over rising oil prices after an output cut by the world’s biggest exporters of the commodity.
The benchmark Philippine Stock Exchange index (PSEi) went down by 57.95 points or 0.88% to close at 6,472.04 on Tuesday, while the broader all shares index fell by 16.47 points or 0.47% to end at 3,481.96.
“The stock market closed lower on Tuesday in thin trading, as investors’ risk appetite continued to wane ahead of the week-long Lenten Break,” Papa Securities Corp. Equities Strategist Manny P. Cruz said in a Viber message.
“Local shares remained apprehensive ahead of the release of the local inflation on Wednesday amid renewed concerns after oil price rises following an unexpected production cut from Organization of the Petroleum Exporting Countries,” Mr. Cruz added.
Local stocks dropped ahead of the release of March inflation data and as the surprise oil output cut weighed on market sentiment, Philstocks Financial, Inc. Research Analyst Claire T. Alviar likewise said in a Viber message.
“Although March’s inflation may most likely ease compared to February’s data given the forecast of the BSP (Bangko Sentral ng Pilipinas), investor sentiment was still dampened by the surprise decision of the OPEC+ to cut oil output, which may lead to an increase in inflationary pressures,” Ms. Alviar said.
A BusinessWorld poll of 16 analysts yielded a median estimate of 8.1% for March headline inflation, near the upper end of the 7.4% to 8.2% forecast of the BSP.
Meanwhile, oil prices jumped over 6% on Monday after the Organization of the Petroleum Exporting Countries and their allies including Russia (OPEC+) announced surprise production target cuts on Sunday, raising fears of tightening supplies, Reuters reported.
Brent crude was last up 0.44% to USD 85.3 per barrel on Tuesday.
OPEC+ had been expected at a meeting on Sunday to stick to cuts of 2 million bpd already in place until the end of 2023, but instead announced further output cuts of around 1.16 million bpd.
Back home, the majority of sectoral indices declined, except for property, which rose by 31.25 points or 1.15% to 2,743.32.
Meanwhile, financials went down by 32.63 points or 1.8% to 1,774.13; services fell by 26.36 points or 1.61% to 1,610.34; holding firms declined by 70.51 points or 1.1% to 6,299.42; industrials dropped by 38.55 points or 0.41% to 9,288.99; and mining and oil decreased by 22.85 points or 0.2% to 10,905.80.
Value turnover went down to PHP 3.99 billion on Tuesday with 2.40 billion shares changing hands from the PHP 4.08 billion with 1.77 billion issues traded on Monday.
Decliners narrowly outnumbered advancers, 92 to 91, while 60 names closed unchanged.
Net foreign selling rose to PHP 238.40 million on Tuesday from PHP 68.26 million on Monday. — By A.H. Halili with Reuters